Tucker Department Store Utilizes the Retail Inventory Method to Estimate

question 201

Multiple Choice

Tucker Department Store utilizes the retail inventory method to estimate its inventories. It calculated its cost to retail ratio during the period at 75%. Goods available for sale at retail amounted to $800,000 and goods were sold during the period for $500,000. The estimated cost of the ending inventory is

• A) $300,000.
• B) $600,000.
• C) $225,000.
• D) $400,000.

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Definitions:

Cost-Plus-Fixed-Fee Pricing

A pricing strategy where the seller charges the cost of production plus a fixed fee as profit.

Standard Markup Pricing

A pricing technique where the selling price of a product is determined by applying a specified percentage markup to its cost.

Bundle Pricing

A marketing strategy where several products or services are offered for sale as a combined package at a reduced price.

Cost-Plus Pricing

A pricing method where the sale price is set by applying a predetermined markup to the cost per unit of a product.